Dubious is a generous way to describe how Americans view financial services professionals. Even five years after the financial crisis, more than half the people surveyed recently by the Harris Poll rated the overall reputation of the financial services industry as negative. Just 46% of respondents in another recent study identified themselves as "trusters" of the global financial services industry.

Although these figures are slightly more positive than in previous years, they remain a major concern. The severe downturn in both the markets and home prices caused many investors to lose much of their savings. And the Madoffs and Stanfords of the world caused the public to grow more skeptical of investing and entrusting their money to financial professionals.

Yet there's hope. It turns out that a positive personal reputation is more important to most of the public than its view of the whole industry. Some studies show that existing clients tend to fully trust their own advisor in spite of their views on the industry as a whole. A John Hancock study last year even found that affluent U.S. investors tend to trust their advisors more than their doctors or accountants.

Because of the negative industry perceptions, advisors must establish transparency and honesty as top priorities. Clients' financial goals must be evaluated carefully and appraised objectively to ensure their investment portfolios and objectives are aligned. These best practices offer valuable ways to strengthen public confidence in our industry. They should be part of your standard protocol:

Be trustworthy. Work constantly on building deeper relationships. Even if the market takes a turn for the worse, your clients must feel confident that their financial decisions were sound and that they can rely on you for trusted advice and counsel.

Listen to your clients. Let them know their interests are your first priority. People know when they are being sold to - they want sound advice that meets their unique needs, not a cookie-cutter sales pitch.

Communicate frequently. Clients are exposed to a daunting array of opinions regarding the health of the industry; they need to know their advisor is available and reliable when concerns arise.

Put your client first - always. Every decision you make should help your clients achieve their financial goals and objectives. Every recommendation must be held to the highest ethical standards, and moral practices must be observed in an advisor-client relationship.

Financial professionals should focus on ways to raise the positive perception of the whole industry. It is only after the public has observed and experienced the ethical expertise of individuals that trust and confidence in the industry can be fully restored.


Keith W. Johnson, CFP, is vice president of the practice management group at Curian Capital in Denver.

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